Monday, March 02, 2009

Savings Rate Rises to 14-year High in January: 5%

WASHINGTON (MarketWatch) - U.S. households socked away most of the extra income they got in January from annual cost-of-living raises, boosting the personal savings rate to 5%, a 14-year high (since March 1995, see chart above, ), the Commerce Department reported today.

7 Comments:

At 3/02/2009 9:48 AM, Anonymous Anonymous said...

I think that Rex Nutting at Marketwatch is misinterpreting the data. Personal income rose $45 billion, personal outlays rose $55 billion but personal current taxes declined $138 billion.

Is it an anomaly for tax payments to decline by such a large amount in a single month?

Households spent more than they earned but saved via lower tax payments.

 
At 3/02/2009 10:57 AM, Anonymous Machiavelli999 said...

""Savings Rate Rises to 14-year High in January: 5%"

This is not a good thing in the current environment Mr. Perry.

 
At 3/02/2009 11:39 AM, Blogger Mayfield said...

Savings and investment are the foundation for sustainable economic growth.

The numbers are encouraging, but are likely based in fear and uncertainty about the future.

Despite what the Keynesians tell you, we can't spend ourselves into prosperity.

Consumption is a result of prosperity, not its cause.

 
At 3/02/2009 2:54 PM, Anonymous Machiavelli999 said...

Savings does equal investment. But when that investment is all going to Treasuries that does not lead to growth unless the government spends.

Stop moralizing Mayfield and think about what you are saying.

 
At 3/02/2009 7:38 PM, Anonymous Anonymous said...

But when that investment is all going to Treasuries that does not lead to growth unless the government spends.

This is gibberish. The government competes with the private sector for capital. The reason that savings are "going to treasuries" is because of the current market turbulence. If the government spends this money then it will not be available for private investment in the future. That is why Obama's multi-trillion dollar deficits will slow economic growth. His spending will suck up all the available capital.

 
At 3/02/2009 8:10 PM, Anonymous Machiavelli999 said...

Anon,

What do you think will alleviate uncertainty and what would be the catalyst for private capital to leave Treasuries?

Export demand? No
Consumer demand? No

Only government demand can be that catalyst. If not, people will just keep their capital in Treasuries.

 
At 3/02/2009 9:58 PM, Anonymous Ralph Short said...

mach 999, the only reason people are not investing is because of government.

Perhaps, you have not been watching the equity or real estate market lately.

The bottom line here is if it was not for the uncertainty of the leftist government we would be investing our money in productive enterprises.

The current government despises productive.

 

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